Sunday, December 17, 2017

Mobile banking: How do we get there?

Posted by OnCourse Staff December 31, 1969 7:00pm

Photo Credit: intomobil

With the advent of the smartphone and tablet computer, mobile banking has become the next step in the evolution of online banking. Many banks now allow customers to access their accounts, make transfers and payments, and conduct other transactions - all from their mobile devices.

But with these technological advancements come some challenges. Despite the many benefits of mobile banking, customers are still wary of electronic banking methods. As a result, many community banks are reluctant to fully plunge into the mobile arena.

Keep an eye on the prize

For customers, mobile banking offers convenience.

I

 
 For banks, it offers reduced servicing costs, enhanced customer retention, opportunities for cross-selling services and other benefits. A December 2010 Nielsen Company survey found that mobile banking customers have a higher average net worth and maintain higher account balances.

Another potential benefit is that mobile banking may appeal to customers who don’t use online banking and may not even have computers. To attract them, banks need to provide a mechanism for signing up without the need for an online banking account.

Don't confuse the terms

Don't confuse mobile banking with mobile payments. Although the terms are used interchangeably, mobile banking is relatively established while mobile payments are in their infancy. The latter allows customers to make point-of-sale or other payments using near-field communications (NFC) chips embedded in, or attached to, their mobile devices.

Mobile payments are being pushed by several companies – including Google, Facebook, and several credit card and cell service providers. The banking industry has been slower to embrace the technology, however, in part because the industry hasn’t developed a cohesive business model for implementing and monetizing mobile payments. But the future for mobile payments looks bright. Juniper Research forecasts that by 2015, the number of users will reach 2.5 billion and that the value of the mobile payments market will reach $670 billion.

Educate your customers

Customer fears about security are one of the biggest challenges for banks that wish to provide mobile services. According to Javelin Strategy & Research, the number of customers who view mobile banking as “unsafe” increased from 25% to 40% from 2009 to 2010.

To ease these concerns, banks must educate their customers about their role in security. The most sophisticated technology is useless if customers choose easily guessed passwords or access their accounts through unsecured Wi-Fi hotspots. Multiple-factor authentication (such as temporary codes sent via text message) can help, but it's also important for customers to protect themselves.

Customer education also can help build trust in mobile technology. For example, even though many people view mobile payment technology as unsafe, experts say that it's safer than credit cards because the data is encrypted.

Take a proactive approach

To prepare for an increasingly mobile world, conduct surveys or take other steps to understand what your customers want and expect from a mobile banking platform. It's also a good idea to educate management and staff about mobile platforms and services and to review and update your policies and procedures to keep pace with technological changes.

Make sure you work with reputable, experienced vendors. To minimize your risk, vet providers thoroughly and review contracts closely.

Develop a strategy

Mobile banking advancements continue being made. Some very large banks, for example, now permit remote deposit capture, which enables customers to scan checks using a device's built-in camera and deposit the funds wirelessly.

If you're taking a "wait and see" approach to mobile innovations, it's a good idea to begin thinking about mobile strategies now. Not only will this position your bank to take advantage of the technology, but it also should ensure that your infrastructure investments can support mobile banking down the road.

Comments

Add a comment

  • Required fields are marked with *.

If you have trouble reading the code, click on the code itself to generate a new random code.



 Image

OnCourse Staff

The OnCourse writing staff work to keep you informed about the most pertinent financial industry news of the moment



OnCourse Staff's Posts Subscribe to RSS Feed



Training – An Investment and Risk Management Tool
Are You Gambling with Your BSA Program?
Does your 401(k) Plan need an Audit?
Same Day ACH Credits – Phase One
Is the IRS Status of your Defined Benefit plan in Jeopardy?
Is your Institution Monitoring Working Capital Lines of Credit?
Financial Reporting and Regulatory Update on the Horizon
Planning in a Consolidating Banking Industry
To opt-out or not to opt-out, that is the question – A reminder on March 31, 2015 Call Report, Schedule RC-R, item 3.a
Cybercriminals Broaden their Attacks in Social Networks
The Importance of Segregating a Bank’s Credit Function from its Lending Function
Requesting Current Financial Information
Countdown to Windows XP End of Life and Support: Are you still at Risk?
314(b) Distinct Advantages for Financial Institutions
Where is the Document?
Do You Know The Security Features of the New $100 Bill?
Segregation of Duties for Wire Transfer Processing
Community Banks Slowly Warm Up to Private Student Loans
Has your Bank updated the Adverse Action Notice?
How Does Your Bank Handle Customer Requested Maintenance Changes?
OCC Releases Booklet on "Common Sense" Community Banking
New SAR Filing Updates
The Importance of BSA Training
FFIEC Proposed Risk Management Guidance on Social Media: Beware and Prepare
Pandemic Preparedness: Are you testing your Pandemic Plan?
FFIEC issues revised “Supervision of Technology Service Providers” booklet
Is Your Institution's Marketing UDAAP Compliant?
Electronic Work Papers - Why P&G Made the Switch
Community Lenders Seize Market Share From Big Banks by Using Advanced Online Lending Technology
New FinCEN Guidance for CTR Aggregation for Businesses with Common Ownership (FIN – 2012 –G001)
Curry: Operational Risk Now OCC’s Top Concern
JOBS Act Client Alert - Rules 506 of Regulation D
Wall Street Receives Volcker Rule Clarity
De-stressing with stress testing
Banks Participate in Information Sharing to Battle Online Theft
IT security: Is your program still effective?
Mobile banking: How do we get there?
UBS further struggles with $2 Billion loss by Rogue Trader
Capital One Becomes Dodd-Frank Test as Nation’s Fifth Largest Bank
Community Banks to receive US Funding for Small Businesses
FDIC fields questions about overdraft guidance
Negligent Hiring – A mistake can cost more than just money!
From Embezzlement to Imprisonment: Former Citigroup employee faces charges with $19.2 million in bank fraud
Finding the Right Hire
Model behavior: Is your ALM model capturing your bank’s risks?
ALLL best practices: Pay attention to qualitative factors
Abandoned Property Law, and its new New York State of Mind
FDIC releases Provisions on Dodd-Frank to help Community Banks
Social Media in the Employment Arena – It Gets Funky!
Banks and Businesses get "swiped" over Fees
A little bit of this, and a little bit of that: Fed Unveils list of Banks Helped during Financial Crisis of 2008
To Test or Not to Test; That is the Question
2011 Failed Bank List Hits 25
Committee on Financial Services to Hold Hearing on the Effects of Dodd-Frank on Small Biz and Banks Today
2011 Failed Bank List up to 18
The Test Drive: Leasing or Buying a HR IT Platform
Double Digits: Bank Closings up to 11 in 2011
FCIC Releases Report on the Causes of the Financial Crisis
Another One Bites the Dust: Regulators Close 4 Banks
On Notice: FDIC Issues Rule for Temp Unlimited Deposit Insurance
2011 Failed Bank List Up to 3
Stick 'Em Up!
Time for a Tune-Up: The Necessity of a HR Audit
Visa Instituting Two-Tiered Debit Card Interchange Structure
The First Failed Banks of 2011
The Law on Your Side: Understanding HR Regulations in 2011
No Respite from RESPA